Medicare also gave bonuses to 21 Minnesota hospitals that scored high on quality.

The hospitals are penalized or rewarded based on a small fraction of their Medicare payment reimbursement.

Medicare rated nearly 2,700 hospitals across the United States on two dozen quality measurements, including the rate of in-hospital infections, patient satisfaction surveys, and the number of patients who died within 30 days of admission for heart attacks, heart failure, and pneumonia.

The program has a maximum penalty or reward of 1.25 percent, up from last year's 1 percent range.

Hospitals in Minnesota received average bonuses of 0.21 percent. The national average was 0.24 percent.

The report finds the program rewarded seven Minnesota hospitals that it penalized last year; and penalized six Minnesota hospitals it rewarded last year.

The Hospital Value-Based Purchasing program is part of the federal health care law's focus on reshaping the payment system so hospitals are paid based on quality patient care rather than the number of medical procedures performed. The annual quality incentive program is in addition to another Medicare program, which penalizes and rewards hospitals based on preventable hospital re-admissions. Kaiser reported those results in August.

This report was produced in collaboration with Kaiser Health News and NPR.